Managing compliance risk after MiFID

Paola Musile Tanzi (Business and Law Department, Perugia University, Perugia, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy)
Giampaolo Gabbi (Department of Business and Social Studies, Siena University, Siena, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy)
Daniele Previati (Business and Law Department, Roma Tre University, Rome, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy)
Paola Schwizer (Department of Economics, Parma University, Parma, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Publication date: 15 February 2013

Abstract

Purpose

The purpose of this paper is to focus on changes in the compliance function within major European banks and other financial intermediaries and on the effects of Markets in Financial Instruments Directive (MiFID) implementation.

Design/methodology/approach

The four areas of research seek to answer the following questions: Is the positioning of the compliance function “at the top” of the organizational structure? Are the roles attributed to the compliance function, their knowledge and their instruments consistent with their responsibilities? Do the methodologies applied follow a qualitative and/or a quantitative approach? Is the interaction between the compliance function inside and outside the structure appropriate to the goals of compliance? In total, 31 top international groups based in Europe were invited to take part in the research, 16 of them accepted.

Findings

The authors observed a resolute adjustment to the regulations in terms of macrostructure and high levels of compliance function competences in investment services and business knowledge, with a low variation. The encouraging news coming out of the results of the research is the confirmation of the presence of a connection between the compliance function and both the system of values and of incentives.

Originality/value

The paper's international sample offers a unique opportunity to highlight the critical areas of the compliance function within international groups, with growing operational complexity in a framework of principle‐based regulation.

Keywords

Citation

Musile Tanzi, P., Gabbi, G., Previati, D. and Schwizer, P. (2013), "Managing compliance risk after MiFID", Journal of Financial Regulation and Compliance, Vol. 21 No. 1, pp. 51-68. https://doi.org/10.1108/13581981311297821

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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